Minnesota Power Asks Regulators to Consider a Reduced Rate Request

Higher demand for energy from large industrial customers provides an
expected benefit to other customers

DULUTH, Minn.--(BUSINESS WIRE)--
Minnesota Power, a utility division of ALLETE (NYSE:ALE), today filed an
updated request with the Minnesota Public Utilities Commission (MPUC) to
reduce the amount of its current rate request from $55 million to
approximately $39 million.

In its filing, the company told state regulators that increased energy
demand from the region's mining industry is expected to result in
higher-than-expected revenue from electricity sales. Consequently, the
required revenue from other customers, including residential and small
business customers, will decrease.

"Minnesota Power believes that healthy mining and timber companies
improve our region's economy and quality of life," said David McMillan,
executive vice president Minnesota Power. "One way that area residents
benefit from these businesses is in the cost of energy. As mining and
paper companies expand production, they use more energy, which in turn
can reduce the costs others must pay for delivering the energy we
produce."

Minnesota Power filed its original request for a rate review in November
2016, to support infrastructure investments, efficiency upgrades and
business expenses, recommending a 9.1 percent average increase in
electricity rates for all customers, including an 18 percent increase
for those receiving residential service. With today's filing, the
updated requested rate will result in a 6.1 percent average increase,
with a 15 percent increase for residential customers. Minnesota Power
also has requested that the interim rate increase, which has been on
customer bills since January, be reduced from 5.6 percent to 5.1 percent
or $32.2 million.

However, the total change that customers are seeing in their monthly
bills will be less than this increase requested by Minnesota Power. The
impact of this rate request already has been partially offset by a
reduction in a monthly energy charge used to pay for renewable energy
investments. Consequently, the net increase from the rate request that
typical residential customers will see in their monthly bills in
mid-2018 will be approximately 10 percent, if Minnesota Power's rate
request is approved in full.

A typical residential customer's bill would increase from about $81 per
month to about $90.

"Our EnergyForward plan to ensure reliable and safe power
from a cleaner mix of energy sources has transformed how we produce and
deliver energy to our customers," McMillan explained. "This is the first
time since the start of EnergyForward that we have
requested a rate review by state regulators. When customers think about
investments we have made in our power plants and the energy grid, we
hope they agree that an increase in monthly bills of an average of $9
per month is resulting in significant value for this region," McMillan
said.

The MPUC's rate review process will continue with a series of public
hearings that will take place in communities throughout Minnesota
Power's service territory this summer. A final rate determination is
expected in early 2018.

Below are examples of the effect of the proposed increase on typical
customer bills. Individual changes may be higher or lower depending on
actual electricity usage.

New TOTAL

Average

monthly cost

Additional

monthly

Previous

Interim

Renewable

with interim

proposed

kWh

monthly

monthly

Adjustment

and renewable

final monthly

Customer Classification

usage

usage

increase

charge

adjustments

increase*

Residential

744

$81

+

$4

-

$4

=

$81

$9

Residential CARE

778

$66

+

$3

-

$4

=

$65

$9

Residential Dual Fuel

1,119

$102

+

$5

-

$6

=

$101

$3

General Service

2,670

$299

+

$14

-

$15

=

$297

$10

Commercial & Industrial Dual Fuel

4,278

$371

+

$17

-

$25

=

$363

$11

Municipal Pumping

6,220

$676

+

$31

-

$36

=

$671

$26

Large Light & Power

297,246

$25,714

+

$1,155

-

$1,706

=

$25,164

$356

Large Power

54,834,528

$3,608,097

+

$171,332

+

$51,463

=

$3,830,892

-$31,952

Street & Area Lighting

364

$61

+

$3

-

$2

=

$62

-$3

*If the $39 million increase we requested is approved by the MPUC in
early 2018, the average residential bill will increase from $81 a month
to $90.

Minnesota Power provides electric service within a 26,000-square-mile
area in Northeastern Minnesota, supporting comfort, security and quality
of life for 145,000 customers, 16 municipalities and some of the largest
industrial customers in the United States. More information can be found
at www.mnpower.com.
ALE-ENRG

The statements contained in this release, and statements that ALLETE
may make orally in connection with this release that are not historical
facts, are forward-looking statements. Actual results may differ
materially from those projected in the forward-looking statements. These
forward-looking statements involve risks and uncertainties and investors
are directed to the risks discussed in documents filed by ALLETE with
the Securities and Exchange Commission.